Analysis of Macro-Environment Implications for the Mortgage OriginationEssay Preview: Analysis of Macro-Environment Implications for the Mortgage OriginationReport this essayTO: BUS 470 ConsultantsFROM: Fred Smith, President Mortgage Loan Origination Trade AssociationDATE: November 20, 2011RE: Analysis of Macro-environment implications for the Mortgage OriginationAfter pondering recent Wall Street Journal articles on sovereign debt, fiscal policy and monetary policy, I decided to use consulting services to assist me with identifying the most critical strategic issues and their respective root causes our industry faces and developing actionable recommendations to ensure the industrys continued success.
I have received dozens of email inquiries from people looking to invest a considerable amount of time and resources in macro-environment issues and how to address them.
I’ve included my take on what I view as key policy-relevant issues based on a series of articles I’ve written, and several blogs I’ve posted and read over the years. As a result, I’ve made good use of my own research skills at my disposal in my work to provide detailed and balanced conclusions for the entire profession. After a considerable amount of trial and error, I’m pleased to share these recommendations for addressing the macro-environment problem so that the best can be learned and sustained through real-world practice. Here are some of the key components of my study…
1) My approach. First, I set out to establish a model to inform the macro-environment analysis. That is, a model that allows economists to make sound forecasts and then demonstrate that a new or interesting finding is likely not readily found by the population.
Second, a model that can produce predictions that can lead to some of the key decisions people make with regard to housing.
Third, a model that can produce a set of indicators that are easily compared to real-world trends by some third-party market participants across industries and markets that will help identify the emerging and emerging mortgage market trends.
The following two sets of models, one based on a real-world study (i.e., with only a limited empirical basis) and using our expertise, are the foundation for the project. Let me provide some background.
Answering Questions:
1) What will the world’s leading banks (or derivatives) do should new financial systems (i.e., securitized securities, securitized debt or long-term debt securities) become available?
2) What are some recent trends from US financial institutions that are emerging and emerging?
3) Is the subprime mortgage crisis a recent development? Why is it relevant?
4) What trends are emerging as a result of the housing crisis? Why is this happening? Why would Wall Street think such developments are important?
I’m not going to say what each of the three models suggests, but the core findings of each are all important. And more should be said about all three models.
In my view, and consistent with more traditional macroeconomics, the fundamental problems that have led to the current housing boom or other such financial and regulatory crises are the ability of financial institutions to sell the securities they sell to the broader economic system (i.e., finance) and other financial institutions to hedge their financial holdings. While some financial institutions do provide capital liquidity and some do not, this “bubble” provides a large degree of margin that is insufficient to offset the liquidity loss that investors face as a result of the current financial crises
I have received dozens of email inquiries from people looking to invest a considerable amount of time and resources in macro-environment issues and how to address them.
I’ve included my take on what I view as key policy-relevant issues based on a series of articles I’ve written, and several blogs I’ve posted and read over the years. As a result, I’ve made good use of my own research skills at my disposal in my work to provide detailed and balanced conclusions for the entire profession. After a considerable amount of trial and error, I’m pleased to share these recommendations for addressing the macro-environment problem so that the best can be learned and sustained through real-world practice. Here are some of the key components of my study…
1) My approach. First, I set out to establish a model to inform the macro-environment analysis. That is, a model that allows economists to make sound forecasts and then demonstrate that a new or interesting finding is likely not readily found by the population.
Second, a model that can produce predictions that can lead to some of the key decisions people make with regard to housing.
Third, a model that can produce a set of indicators that are easily compared to real-world trends by some third-party market participants across industries and markets that will help identify the emerging and emerging mortgage market trends.
The following two sets of models, one based on a real-world study (i.e., with only a limited empirical basis) and using our expertise, are the foundation for the project. Let me provide some background.
Answering Questions:
1) What will the world’s leading banks (or derivatives) do should new financial systems (i.e., securitized securities, securitized debt or long-term debt securities) become available?
2) What are some recent trends from US financial institutions that are emerging and emerging?
3) Is the subprime mortgage crisis a recent development? Why is it relevant?
4) What trends are emerging as a result of the housing crisis? Why is this happening? Why would Wall Street think such developments are important?
I’m not going to say what each of the three models suggests, but the core findings of each are all important. And more should be said about all three models.
In my view, and consistent with more traditional macroeconomics, the fundamental problems that have led to the current housing boom or other such financial and regulatory crises are the ability of financial institutions to sell the securities they sell to the broader economic system (i.e., finance) and other financial institutions to hedge their financial holdings. While some financial institutions do provide capital liquidity and some do not, this “bubble” provides a large degree of margin that is insufficient to offset the liquidity loss that investors face as a result of the current financial crises
RecommendationsFirst, we recommend you to release a series of assistance programs, including the requirements of higher taxes, freezing pensions and wage growth. The second recommendation is to enact large-scale economic stimulus plan, such as financial aid to companies, state governments. Third, we suggest you to continue implement more national bonds purchase plan. Finally, we recommend you to depress current housing price in order to ease the oversupply situation of U.S. housing market.
Current Situation and Fact SummarySince 2008 the U.S. subprime mortgage crisis triggered a global financial crisis and it cause a series of domestic economic regression. Economic recession makes consumers cut their spending, companies cutting production and reduce the production scale. Consumer spending has been further suppressed, resulting in more layoffs, and economy is engaged into a vicious circle. Our recommendation is aimed at stabling unemployment rate and relief financial pressure of state governments and companies.
Analysis and ConclusionThe reasons summed up in the recession are mainly in the following aspects: First, the role of cyclical factors, the U.S. economy experienced high growth over 10 years after undergoing a necessary adjustment; two of the new economy and stock market bubble burst, making it an economic summit to support the information technology revolution, power suddenly reduced; Third, economic structural factors, the peak of over-investment in the economy, over research and development leading to production of excess capacity, once the economic downturn, the original non-linear growth of IT spending and other private investment is immediately thrown into sharp decline; Fourth, macro-control reasons, the Federal Reserve to curb economic overheating and the bubble economy in a substantial increase in interest rates also led to a cooling economy.